Because the banking system operates using fractional reserves,
a. the money multiplier is greater than one.
b. excess reserves are equal to zero.
c. required reserves are equal to 100 percent.
d. banks can loan out only their required reserves.
e. the money multiplier must be equal to zero.
a
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Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can either produce a maximum of eight pies or two cakes in a day. Fred's opportunity cost to produce one cake is
A) one-half pie. B) two pies. C) six pies. D) four pies.
Consider two projects. The first project pays benefits of $90 today and nothing else. The second project pays nothing today, nothing one year from now, but $100 two years from now. Which project would be preferred if the discount rate were 0%? What if the rate increased to 10%?
What will be an ideal response?
A person who voluntarily quits their job in New York and expects to get a similar job in Los Angeles is an example of
If regulation of the firm called for it to earn only a normal profit or rate of return in Figure 27.1, the regulatory agency should set the price at
A. P0. B. P1. C. P3. D. P2.